In Troubled Times, Biofuels Could Be a Winner

It's a new year, there's a new U.S. president, and there is a new climate for biomass energy and fuels. Last year at this time, the biofuels industry had just seen some of the best economic times in its young history, but trouble was brewing with sky-high commodity prices. Just after biofuels survived worldwide blame and criticism for driving up the price of food, markets collapsed, fuel prices fell and, by the way, food prices remained the same. Eventually, several ethanol companies went into bankruptcy, biofuel plants under construction were put on hold, and designs for new plants were filed in the "wait until whenever" file.

However, this is a new day. Before the economy collapsed, close to a dozen so-called second-generation biofuel projects were funded with federal dollars and matching industry investment. In addition, a loan guarantee program was established for these high-risk projects. Most of these projects continue to go forward and hold promise for demonstrating the technical and economic viability of revolutionary new approaches to making renewable fuels. This viability will have the snowball effect of raising the biofuel bar and should bring confidence to lenders and investors.

Enter the new president. In an attempt to stimulate the U.S. economy, President Barack Obama proposed a multibillion dollar rescue plan. The final details of this plan were not known at press time, but language thus far indicates billions of dollars in support of renewable energy and potentially hundreds of millions of dollars for biofuels and infrastructure development. Several billion dollars will also be added for loan guarantees related to alternative fuels and energy. Added to the financial incentives are the strong biofuel positions of the president's selections for heads of the U.S. DOE, EPA and USDA. Things are looking up.

So is it thumbs up for the future of biofuels? I say we really only have one direction to go, and that is up. Current annual biofuel production in the U.S. is approximately 8 billion to 10 billion gallons, primarily from corn ethanol and soybean-based biodiesel. As part of the Energy Independence and Security Act of 2007, a Renewable Fuels Standard Program was established that requires progressive increases in biofuels (for motor vehicles) production to a level of 36 billion gallons by 2022. With corn ethanol and soy-based biodiesel capped at 15 billion gallons because of cropland availability and food woes, around 21 billion gallons will have to be supplied from biomass sources. We are required by law to increase biofuel production-and fast. Biomass from residues of agriculture, forests, manufacturing and energy crops must be utilized.

We have discussed in this column and numerous other articles in this magazine over the past two years many different technologies and biomass feedstocks that are being used for producing a variety of different biofuels. The number of approaches is dizzying, but in the race to develop efficient and cost-effective technologies for cellulosic ethanol, non-methyl ester diesel, renewable jet fuel and green gasoline, there will be winners. I heard a colleague call it the $50 billion worldwide prize-in reference to the first technology to truly produce renewable biomass-derived liquid motor fuels at a comparable cost to corn ethanol or biodiesel.

In this new year, the United States is getting close to a renewable liquid fuel prize. As mentioned, the economy does not seem to be hindering the opening of a window of perhaps one to three years, wherein technology winners for viable biofuels will be evident. I say faltering economy be damned! Let's get a winner. Maybe it's the EERC renewable diesel/jet fuel process that converts any type of vegetable or animal triglyceride oil to a hydrocarbon-only fuel with the same properties as petroleum diesel. The EERC is very close to inking a deal for commercial production. Whoever wins, we will all win. Let's pace ourselves, stay on course and run for the prize.

Chris J. Zygarlicke is a deputy associate director for research at the EERC and is also vice chairman of the National Hydrogen Association Renewable Hydrogen Working Group. Reach him at czygarlicke@undeerc.org or (701) 777-5123.